Managing a Powerful Workforce: Performance Analytics, Not Time Tracking

By Bill Carmody @BillCarmody

During the Collision Conference, I had a distinct pleasure of meeting and speaking with Adam Miller, Founder and CEO of Cornerstone OnDemand, a publicly traded maker of cloud-based talent management software. As Mr. Miller works with many Fortune 500 clients as well as mid-size enterprise companies, I wanted to get his perspective on how companies will manage their workforce in the future.

Will Every Business One Day Hire “Employees” On-Demand?

During the Collision Conference, there was a lot of discussion about an on-demand workforce. Companies like Handy have already adopted an Uber-like workforce model that allows people to flexibly work when they want without being a W-2 employee. To hear some companies talk about a scalable on-demand workforce, they believe it is a forgone conclusion.

Mr. Miller disagrees. “Despite what some people may think, not every business will become an on-demand business; nor should they be” Mr. Miller explained. “Companies have a vested interest in retaining top talent and many people will prefer full-time employment to the on-demand model. Make no mistake. Industries are becoming much more flexible. You can get your work done at home or at a Starbucks, but that’s not the same thing as becoming an on-demand employee.”

Performance Analytics Replace Hourly Time Tracking

So if not all businesses are going on-demand, what does the workforce of the future look like? Mr. Miller believes that the answer is a whole lot more real-time feedback, predictive employee hiring and retention programs and new levels of insights being discovered with big data performance analytics.

“Beyond benefits and compensation, people want to work for companies for three reasons: They believe in the mission. They want to be part of the culture. They want to grow as individuals” he says. “I don’t think people fully appreciate that Millennials expect to go through 5 to 7 careers in their lifetime. Not jobs. Careers. If companies want to hire and retain great talent, they need to be much smarter about the needs of their employees. Gone are the days when we keep track of hours spent. If your employee is working from home, how can you verify the hours they work anyway? Instead, they are going to be graded by their peers on the tasks they complete and the projects they are working on. Performance analytics will replace hourly time tracking, and the function of mangers will change substantially.”

Hourly time tracking has driven many services-based industries for years. Lawyers, for example, charge not based on the value delivered or outcome achieved, but rather how many hours they spend on behalf of any client. The rise of performance analytics over hourly time tracking has profound implications for how businesses can and should charge for their services.

The Impact of Managing Employees by Results

“The way the modern workforce will be managed is by results, not by hours”, Mr. Miller explains. “How do you measure people? You need to have better, incremental measurements. This idea of measuring people only once a year doesn’t work. You need better markers along the way that people are actually being productive and doing what they need to do.”

What Mr. Miller believes we’re moving toward is real-time feedback across the organization. This could be anything from project-based feedback to activity-based feedback. You’re constantly getting feedback. “The second part of this is that you’re no longer getting feedback just from a manager”, he explains, “because the manager doesn’t have time to do their job and watch you do your job.”

This idea of continuous feedback and measurement means that you need multiple inputs. “We’re moving away from manager-based feedback to essentially crowdsourced feedback.” Depending on what projects you touch and who you interact with, you’re constantly getting feedback on the interactions you have with the team you’re working with. It’s a very different way of managing teams and Mr. Miller is already seeing this shift occur today.

Implications of a Performance-Driven Workforce

As entrepreneurs, we should be excited by this trend. The on-demand trend may not be for every company, but the Uber ratings system appears to be permeating many industries and business models and becoming much more pervasive. The implication for service-based businesses is clear. Utilization and realization rates will ultimately give way to real-time rating systems which provide a much more clear indication of the value of the time being spent by your team–not just hourly allocations by project or client.

Aligning a company’s results with the individual contributions of each member of your team has, at least to date, been much more art than science. But, according to Mr. Miller, we’re seeing very positive trends toward a new era of real-time performance feedback and peer-to-peer evaluation of the value being delivered. As this trend takes hold, we could very well say farewell to time tracking as we look to increase insights around the ongoing results we deliver.